Workplace pension reforms get the thumbs up
Following the Pensions Act 2008 receiving Royal Assent in November 2008 from 2012 employees will either be automatically enrolled into their employer's workplace pension scheme or entered into the new Personal Accounts Scheme.
At present there are around 7 million people who are not saving enough for retirement. These statistics have formed the basis of the introduction of these reforms to ensure that those who have not in the past had the opportunity to build up any savings for retirement can now do so.
There will be minimum contribution levels for employees of 4% which will be matched by minimum contributions for your employer of 3% and 1% tax relief from the Government. Even though employees will be automatically enrolled everyone will have the option to opt-out of the scheme should they wish.
The Personal Accounts Scheme will be a low-cost, independent, workplace pension scheme that any employer can use.
The Department for Work and Pensions recently conducted a survey and results have revealed that 64% of employees welcome the change in pension reforms and believe it to be an extremely attractive option.
Pensions Minister, Rosie Winterton said: "More and more people are becoming aware of the need to save for later life, and appreciate that these reforms will have an important role to play in ensuring that people can look forward to the sort of retirement they have in mind."